Some industry commentators have suggested that the Titanic II will not make a profit. On the other hand, Mr. Palmer, the originator/funder of the project, says that he will make a fortune. Who is right?
As I will discuss in this article, there is a tension between building an authentic re-creation of an 1912 ocean liner and making the maximum profit.
Ship Building Costs
The cost to build the Titanic II is an estimated $500 million, but I suspect that this is just a guess at the moment, until the shipyard quotes come in. That does not sound extreme to me, because some megaships in recent years have cost £1 billion plus to build! However, the Titanic II will be a relatively small ship by today’s standards, at around 56,000 gross tonnes, carrying 2,435 passengers. She will be a third of the size of many modern cruise ships.
However, the intricacies of Titanic II’s external appearance and her period décor will probably mean that she will cost somewhat more to construct, than other similar sized smaller ships.
Another advantage with the Titanic II size is that it will not have 6,000+ berths to sell per week, as many newer megaships do
Titanic II will also be small enough, to easily be accommodated by most ports of call and cruise terminals, throughout the world.
Novelty Value
Critics have suggested that the ship will do very well in her first season, but the novelty will wear off and bookings will decline, along with profits, in her second season.
However, this augment could be made with any new ship. The Titanic legend continues to endure. I hear that the Chinese love both the Titanic story and Cameron’s movie. The Chinese people have become more affluent in recent years, so sections of the population have more disposable income than before and china is not short of people. Some of these nouveau riche will be spending their money on cruising, they already are. Hopefully some of it will be on Titanic II tickets.
There are probably not enough ocean liner enthusiast and film buffs in the world, who want to cruise, to fill any ship year after year. A cruise line/ship needs to appeal to a wider audience for its continued success.
However Cunard’s ‘Queen Mary 2’ has been very successful since she entered service in 2004. Although she appeals to ocean liner fans and history buffs, some passenger simply book her because they have heard that she offers an excellent upscale experience. Titanic II will need to do the same.
The Fare
I suspect Titanic II will be able to command a premium fare (see here), because of the pure novelty of the experience. She will be a one off. She may be able command 50% higher fares or more, than many other modern ships, especially in season one.
However, one thing that Mr. Palmer will not be able to fully exploit to his full benefit, is the sales of on-board extras. Most modern ships have a multitude of passenger income generating opportunities. They have big Casinos, mini-shopping malls, very extensive Spa facilities and multiple dining venues. These facilities often carry surcharges, some of which can be pretty high (especially Spa/beauty treatments, for example). These on-board facilities can generate 30% additional profit, on top of the fare. In short, the more opportunities on-board a ship for passengers to spend extra money, the more they will spend. However Titanic’s facilities for income generation will be very modest.
However Mr. Palmer has said that he will include some non-original features on-board the Titanic II (mainly on the new safety deck), such as small Casino and at least a few shops. There will also be a small show lounge. However, Mr. Palmer could be creative: he could charge a fee per seat, per show, charge for the Turkish bath, modest gym, indoor swimming baths, squash court, visits to the reproduction bridge and the viewing galleries, in two of the funnels.
Amenities
Modern cruise passengers have come to expect certain amenities as standard on-board their chosen ships.
Modern ships have multiple deck facilities, including sports courts, multiple pools, hot-tubs, aqua-parks for children, water chutes, bungee ropes/trampolines, even rope-courses or climbing walls, games arcades and laser tag etc. Titanic II will have none of these.
In terms of passenger accommodation, three decades ago, balcony cabins were pretty rare on-board cruise ships. Ocean Liners never had any. However modern mega-ships have thousands on offer, which attract premium fares. Titanic II will not have any.
In total contrast to a modern balcony cabin, we have the Titanic’s 3rd class (steerage) cabins. Palmer said he wanted the ship to be as authentic as possible, but I can guarantee that he will not be re-creating the steerage cabins authentically.
The Steerage cabins accommodated 1,100 passengers and were located in the least desirable parts of the ship, such as at the bow or the stern, near the steerage mechanism (hence the nickname). A lot of passengers were accommodated in a relatively small space. The 3dc class cabins had no natural light, multiple buck beds and no private bathrooms.
I suspect Palmer’s 3rd class cabins design will be very similar to any modern ‘inside’ cabins, all complete with private en-suite bathrooms. Otherwise nobody would book them.
Now if they each has two berths, that could be up to 550 inside cabins, if he is true to the original specification of steerage for 1,100 passengers. However, that would be a record number of inside cabins for any ship, including megaships. However these are the least attractive type of cabins for many modern passengers, so do not sell at a premium fare. Maybe Palmer will reduce the third class compliment of cabins and increase the 1st and 2nd class one.
The Competitors
Some commentators may argue that the Titanic II will not have any competitors. There will be no other 1912 replica ocean liners out there (unless Palmer builds replicas of Olympic and Britannic). Titanic II will be unique.
It is not yet clear how luxurious the Titanic II will actually be (see my article here). However her passenger capacity of 2,435 and passenger-space-ratio is typical of a ‘mass-market’ (standard) experience and definitely not a ‘luxury’ one.
This may make the many ships on offer, from the luxury lines, such as ‘Crystal’, ‘Silversea’, ‘Seabourn’ and ‘Regent Seven Seas’ direct competitors, to the Titanic II. These lines typically operate smaller ships, with lower passenger numbers, higher staff ratios, generous cabin and decks pace and excellent food and service.
These luxury lines offer large suites with private balconies for every passenger, even private butlers and some eye watering fares. These luxury products may prove more attractive to some potential well-heeled passengers, than the Titanic II will.
Cunard fleet
The historic Cunard line currently has three ships in their fleet (to be expanded to four in 2022): The Queen Mary 2, Queen Elizabeth and Queen Victoria.
Elizabeth and Victoria share a very similar design and are actually cruise ships that have Ocean liner livery and décor. However the Queen Mary 2 is a modern Ocean Liner. All three ships provide a traditional ocean liner ambience, but with all the modern accoutrements such as numerous balcony cabins.
If you want an ocean liner experience, you could easily choose Cunard instead of the Titanic II. The Queen Mary 2 in particular, is scheduled to cross the North Atlantic pretty regularly, each year, from Southampton to New York and return.
SS United States
The SS United States is an Ocean Liner built in 1952 for the American Line. She actually holds the Blue Riband record for the fastest crossing of the North Atlantic (3 days, 12 hours, 12 minutes). She has been in lay-up since 1969.
Two modern cruise lines, NCL and later Crystal effectively promised to return her back to service (see my article here) but went on to break their promises. She would have made an interesting competitor to the Titanic II, but now continues to rust in lay-up. (However, although she is the most famous American ocean liner, the general public are not necessarily familiar with her).
Below are renderings of Crystal’s propose renovation:
In conclusion
So will Titanic II make money? Yes I think she will.
There is a tension between building an authentic re-creation of a 1912 ocean liner and generating the maximum profit. However, I believe her uniqueness and relatively small size will make her easier to sell and fill.
I personally believe that when she steams (diesels) into Southampton waters, even her biggest doubters and critics will have a lump in their throats and will desperately want to ‘cruise’ or ‘cross’ the Atlantic on-board her.
I believe she will be so ‘iconic’, she will market herself.
Malcolm
Titanic II Pros
- She will be a unique replica of the most famous ship ever built.
- There will be no other cruise experience like her.
- She will be a medium sized ship so will be a little more intimate and friendly.
- Navigation around the ship will be easier than on-board today’s megaships.
- Embarkation and disembarkation should be very smooth, given the relatively low passenger. numbers
- She will offer unique features like a replica bridge, Radio Room and viewing galleries in the funnels.
- Being a medium sized ship, she will have easy access to most of the world’s ports.
- She will be as safe and manoeuvrable, as any modern ship.
Titanic II Cons
- She will not have any balcony cabins.
- Some cabins will be more basic that the modern standard.
- There will be no TV’s in the cabins.
- There will be no large atrium – the centrepiece of most modern cruise ships.
- There will be no TV’s in the cabins.
- She will lack sports facilities, apart from a squash count.
- She will not have an external pool on deck.
- There will be no kids facilities onboard.
- Her Gymnasium will be small by modern standards, lacking modern equipment.
- She has no Spa or Beauty Therapy centre (apart from a Turkish Bath).
- Her show lounge will be small and can only accommodate a small proportion of the passengers at any one time.
- The shopping opportunities on-board are minimal.
- Her open deck (the boat deck) is somewhat cluttered.
- Her third class food will be deliberately basic.
- The Casino is small.
Titanic II News 